Thursday, February 2, 2023

Is there a free lunch

The federal government hands out cash either directly or indirectly through various subsidies. The government gets is money from the taxpayers and/or by creating it though the Fed. Everyone and every group gets part of this largess. Farmers get crop subsidies, the oil companies get depletion allowance, homeowners get interest deductions, businesses can deduct almost all expenses, many states allow for state income tax and property tax deductions and the list goes on. Most of these deductions are the result of lobbyist who represent different groups like real estate and the oil industry. The people elected to congress are supposed to be the lobbyist for those who are not represented by other lobbyist. Almost all of these elected officials see the government as responsible for a safety net. Programs designed for those who cannot help themselves. This could be someone who is disabled and cannot work or more commonly it is a single parent mostly moms. When it comes to the other subsidies these officials fall into two categories. The first group tries to initiate laws and regulations which will encourage business to create good paying jobs and the second wants to expand the safety net with programs like free or low cost health insurance and free college. In the past many in congress tried to limit government spending on the expanded safety net but they are a dying breed. Most in congress today see their first responsibility as offering benefits to their constituents. This has resulted in an expanded debt and many do not see this as a problem. They seem to believe in the new economic idea of Modern Monetary Theory which states that the government can create money for any justifiable cause. Some even talk about sending out $1,000 every month to all working people something called guaranteed income. Others want free education and some Medicare for all. The trend of using the federal government to provide benefits has been on the increase for almost 100 years and it will continue because those in congress have discovered that this is the way to get reelected. What will be the long term result. A quote attributed to several different people may be the answer. “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. Is our republic on the way out and we just don't know it?

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